November 9, 2008

Vermont’s Finest

U.S. Senator Bernie Sanders
When the Senate reconvenes of November 17th, I intend to fight for an economic recovery program that is significant enough in size and scope to respond to the major economic crisis this country now faces.

If we can commit more than $1 trillion to rescue bankers and insurance companies from their reckless and irresponsible behavior, we certainly should be investing in millions of good-paying jobs that rebuild our nation and improve its economy.

Sen. Bernie Sanders (Independent of Vermont and an avowed socialist) is a hero of mine. Here, he describes an ideal economic rescue package.

I think liberals and conservatives have reason to get behind his ideas; we can best stimulate growth by embarking on a national project to revamp the basics, such as education, healthcare, and infrastructure. Those are the kinds of projects that create jobs immediately and, in time, pay for themselves many times over. In contrast, handing out money to banks, without placing terms upon its use, is risky in that you don’t know where the money will end up.

NGOs have found this long ago; you donate to developing-world governments, it’s anyone’s guess as to whether it will improve the lives of the people or end up in a government official’s patronage fund. If you give people handouts, it doesn’t solve the long-term problems. But if you invest in the people and the institutions they depend on, the people reach their full potential and will always pay back.

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On Bill Moyers Journal’s blog you wrote, “I guess what I wonder about is what the Republicans do now; the gradual reformation of the Democratic message has made the Democratic candidate the one who talks about personal responsibility and earned success (as Clinton spoke of those who “work hard and play by the rules”), and the limits of government intervention.”

I’m more interested in keeping the public engaged. This was a record voter participation in politics and the public knows the USA government needs to address issues outside of the influence of corporate lobbyists.
It is not over; Change needs you and all of us. Months ahead difficult events must be faced and governments are in the pockets of the central bank.

In this era of financial crisis, the central banks and IMF are meeting in secret to make “bold changes” to the global financial system. I confess that I don’t trust them to have the good of the public as priority.
Therefore the world’s labor and civic professionals should hold public seminars on a new financial system that is more stable and prosperous for all people.
At minimum such forums would focus the public on the solution of this issue as opposed to leaving the solution and control to the bankers. International bankers have no controls or regulatory bodies that I’m aware of (please don’t use the lame excuses that the market forces and their governors and boards regulate them; try that argument on criminals and you would have a clearer understanding of todays’ financial crisis).
*{Addictional benefits: would keep the public actively engaged and Identify infrastructure projects to finance and small companies to contract with}

Yeah, I don’t mean the government doesn’t have responsibility, I just mean it’s hard for the GOP to caricature Obama as someone who says the government should fix everything when he’s made so clear that’s not what he believes.

Ideally, the GOP would reform and become a party where the government helps those who are trying, who just want a fair deal. But, now that Obama has taken the initiative in creating a government that meets you halfway like that, I don’t know what ideological space the Republicans can occupy anymore.

P.S.
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

… The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating.” -Thomas Jefferson

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” -James Madison

“Banks lend by creating credit. They create the means of payment out of nothing.” Ralph M. Hawtrey,
former Secretary of Treasury,
England

“Money is the most important subject intellectual persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and its defects remedied very soon.” Robert H. Hemphill,
former credit manager,
Federal Reserve Bank of Atlanta

“Without the confidence factor, many believe a paper money system is liable to collapse eventually.” Federal Reserve Bank of Philadelphia,
Gold, p. 10

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.” James A. Garfield

“Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess.” Irving Fisher,
100% Money

“If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer.” John Maynard Keynes,
The Economic Consequences of the Peace

“If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.” -Andrew Jackson

Patriotism is not to a political party, but to the USA Contitution and the citizens collectively.

Remain active and repeal the laws and Presidential executive orders that hinders citizens’ liberties protected by the constitution. Search & siezure without prior just cause and without legal access to an attorney; Fiat currency and federal reserve all violates the constitution and this needs to be addressed in this public cry for change by the american people.

I don’t understand what you mean. The Federal Reserve’s job is largely to influence (through open-market operations) the supply of money in the economy. If the Fed didn’t do that, the job would be left to private corporations, resulting in exactly the kind of tyranny expressed so well in those quotes.

The Federal Reserve, as I understand, lends money to banks. Money is created through the lending process (ooogh, those of you at home, take economics if you want to learn how this works), so the Fed can use the rate it lends at (called the “federal funds rate,” I think) to influence the flow of money into the economy. Also, the Fed can buy and sell government bonds (“open market operations”) to increase or reduce the supply of money in the economy. All of this is to nudge the all-important interest rate at which banks lend to each other.

At a high interest rate, money flows more freely (“liquidity”), loans are easier to obtain, and investments are easier to make. However, the more money there is in the economy, the less value money will have (inflation). At a high interest rate, times are tight and money is harder to obtain, but inflation can be staved off and bubbles can be brought under control. (Additionally, keeping interest rates low can deprive the Fed of “ammunition” needed later on to deal with a financial crisis.)

The Fed doesn’t determine the value of money, it merely influences it. We’ve been off the gold standard since the seventies, and the value of a dollar is determined by the market. I appreciate the Fed’s role because, as we’ve learned, nothing so vital should be left entirely to the free market. Even though the Fed can effectively increase or decrease the money supply, a larger money supply simply means that money will be worth less, an effective natural check on the Fed’s power.